Gazprombank released its financial results for 2020 on March 31, and the key results for Gazprom Media were presented in the Media–Business segment.

The financial results of the Media–Business segment were influenced by several factors in 2020 connected with the coronavirus pandemic and all the restrictive measures that came along with it. Most notably, movie theaters were closed in the second quarter of the year, many sports events were suspended or postponed, and business activity declined. These factors had a negative impact on advertising and film-distribution.

The media industry began a smooth recovery in the second half of 2020 once a number of restrictive measures on businesses were lifted. In particular, some sporting competitions were re-launched in the third quarter and advertisers got more active. The positive trend in the advertising market continued in the fourth quarter. Advertisers who previously shifted their budgets to the fall returned to television and increased their activity in the October–December period, including clients in the Transport, Financial Services, and FMCG categories.

Key Financial Indicators of the Media–Business Segment for January–December 2020:

  • Consolidated revenues increased 1.1%, reaching 99.2 billion rubles due to an increase in advertising revenues from Gazprom Media’s broadcast and specialty channels.
  • Advertising revenues increased 2% to 72.3 billion rubles based on 2020 results. To compare, the key TV advertising market decreased 3% in 2020 according to the Russian Association of Communication Agencies (AKAR). The main growth in advertising revenues of the Media–Business segment comes from Gazprom Media’s broadcast and specialty channels. Advertising revenues increased thanks to in-demand content, a successful start to the new television season, and a large number of premieres on Gazprom Media channels from August to December 2020. Moreover, sporting events resumed in the second half of the year, so sports broadcasts returned to television.
  • Revenues from the sale of rights to audio and video content decreased 7% at the end of 2020 and added up to 13.4 billion rubles. The main factor for decreasing revenues was the pandemic. Restrictive measures affected the release of content into movie theaters, especially in the second quarter. A number of restrictions on movie theaters remained in place in the second half of the year, although Gazprom Media companies still managed to release several major films — Ogon (Fire), Serebryannye Konki (The Silver Skates), Streltsov, and Doctor Lisa—which had a positive effect on the film industry. Movie theater chains were able to get viewers back and begin to restore the movie business ecosystem after a number of restrictive measures were lifted. Strong box office results in the first quarter of 2020, as well as increased revenues from Red Media’s paid specialty channels and sports channels in the second half of 2020, allowed Gazprom Media to compensate for the significant decline in the sale of media rights due to the pandemic. 
  • The Holding completed 2020 with an operating profit of 1.8 billion rubles thanks to an increase in advertising revenues, as well as the effective management of consolidated expenses. Gazprom Media’s consolidated expenses decreased by 5.3% based on 2020 results.
  • The Holding recorded a net loss of 5.5 billion rubles, partly due to provisions that were created after testing assets, as is required on an annual basis in accordance with IFRS standards. The creation of these reserves does not affect the company’s cash flow in the reporting period. Ruble devaluation and differences in foreign contracts also affected the company’s net loss.